herstockart/iStock via Getty Images Weyco Group ( NASDAQ: WEYS ) is a shoe designer and wholesaler. The company owns six brands focused on men's leather dress and casual (Stacy Adams, Nunn Bush, Florsheim) and winter and outdoor boots (Bogs, Rafters, Forsake). The company's revenues and profitability have stagnated for much of the past decade as the casualization of men's apparel has eaten into its dress-oriented leather shoes.
Like most wholesalers, the company benefited and then suffered from the pandemic's inventory crisis and posterior glut. However, despite falling sales, the company has maintained gross and operating margins while remaining competitive in the market. Today, Weyco trades at an EV/NOPAT multiple that implies a sufficient return under a scenario of pre-pandemic profitability.
However, the company is posting higher profits despite having lower sales than before the pandemic, meaning the current profits might be more permanent than thought. If that is the case, the multiple could reprice upward. Further, the retailers to which Weyco sells might start recomposing their inventories soon, potentially increasing the company's revenues.
For those reasons, I believe Weyco is a Buy at these prices. Company intro Channels : Weyco is a shoe wholesaler. The company designs the products, manufactures them with suppliers in Asia, and resells them to retailers via a salespeople team.
80% of sales come from wholesale, about 12% are DTC via e-commerce websites, and the rem.